Crude oil and gasoline prices rose for a second day as Hurricane Rita, the third-strongest Atlantic storm on record, heads toward Texas and threatens refineries.
The Louisiana Offshore Oil Port, the biggest U.S. petroleum import terminal, stopped unloading tankers as the hurricane moved through the Gulf of Mexico, a port official said. Royal Dutch Shell Plc, ConocoPhillips and Valero Energy Corp. are shutting down four refineries near Houston as Rita, a Category 5 storm, is forecast to hit the Texas coast on Sept. 24.
"That area is solid with refining capacity," said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "There's an element of panic in the market but that's not surprising given the lack of capacity worldwide at every level, refineries and oil wells."
Crude oil for November delivery rose as much as 98 cents, or 1.5 percent, to $67.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $67.47 at 11:57 a.m. Singapore time. Yesterday, oil rose to $66.80, after touching $68.27, the highest since Sept. 2. Oil has declined 4.8 percent from a record $70.85 on Aug. 30. Prices are 40 percent higher than a year ago.
Gasoline for October delivery rose as much as 6.69 cents, or 3.3 percent, to $2.12 a gallon in after-hours trading at 11:36 a.m. Singapore time. Yesterday, the contract surged 3.9 percent to $2.0531, the highest close since Sept. 6. The futures reached $2.92 on Aug. 31, an all-time high since trading began in 1984. Futures are 57 percent higher than a year ago, reports Bloomberg.
According to Washington Post, together with the four facilities still closed in Louisiana and Mississippi after Katrina, around 14 percent of national refining capacity is now offline.
But the plants in Texas, which are above sea level, face a smaller risk of flooding than the Louisiana refineries that bore the brunt of Katrina, the EIA added.
Gasoline futures rose 8.19 cents to $2.1350 a gallon, taking gains since Friday to almost 20 percent and leading the energy complex as dealers feared refinery closures would strain supplies. Heating oil was up 4.38 cents to $2.0825 a gallon.
"Having more or less traveled together, refined products and crude have become disconnected in recent weeks," said Andrew Harrington, resources analyst at ANZ Bank in Sydney.
"While crude is still moving there are serious refining constraints. With question marks over the damage Rita is likely to cause we're seeing the continuation of a most unusual month."